An Effective Accounting Information and Communication System Must Satisfy Six

question 88

Essay

An effective accounting information and communication system must satisfy six transaction-related objectives.Identify the six objectives.

---

Definitions:

Asymmetric Information

A situation in which one party in a transaction has more or superior information compared to another.

Lemons

In economics, refers to a lower-quality product that is difficult to distinguish from higher-quality products before purchase, notably used in a market context where there is information asymmetry between buyers and sellers.

Adverse Selection

A situation where asymmetric information results in high-risk individuals being more likely to participate in a market, leading to an imbalance in the market.

Durability

The quality of being able to withstand wear, pressure, or damage; the ability of a product to last for a long time.